Indiana Take-Home Pay Calculator (2026)

Indiana has a flat state income tax rate of 2.95%. This is one of the lowest flat rates in the country, and it has been declining gradually over the past decade. The rate was 3.23% as recently as 2022. A series of scheduled reductions built into state law continue to bring it down in small increments each year, with the target of reaching 2.9% by 2026 and potentially lower thereafter.

County income taxes are a significant add-on in Indiana. Every county in the state imposes a county-level income tax on residents, with rates ranging from less than 0.5% to over 3% depending on the county. Marion County, which includes Indianapolis, has a county rate of 2.02%. Surrounding suburban counties tend to have lower rates. Workers in Indiana need to check their specific county rate, as the effective state-plus-county rate varies considerably across the state.

Adding state and county rates together, most Indiana workers pay a combined rate between 4% and 6% on wages. That combined figure puts Indiana in the middle of the income tax spectrum nationally, even though the base state rate is low. A worker in Marion County earning $65,000 pays approximately $1,918 in state income tax (2.95%) plus $1,313 in county income tax (2.02%), for a combined $3,231.

Indiana conforms to federal AGI as the starting point for the state return. The personal exemption is $1,000 per filer and $1,500 per dependent. These amounts are modest and do not substantially reduce the taxable income base. Workers with significant pre-tax deductions like 401k contributions reduce both federal and Indiana taxable income through the federal conformity mechanism.